THE JONES GROUP ACQUIRES KURT GEIGER
Published: 06 June, 2011
The Jones Group Inc. has acquired Kurt Geiger, Europe’s largest luxury shoe retailer based in the United Kingdom, from Graphite Capital, a leading UK mid-market private equity firm, for approximately $350 million (or £215 million) in cash, inclusive of debt acquired. The transaction, which was financed with cash on hand, is expected to be immediately accretive to earnings per share, exclusive of any required purchase accounting adjustments.
The acquisition of Kurt Geiger positions Jones as one of the world’s most powerful portfolios of fashion footwear, immediately increasing its international penetration to just below 20 percent of net revenues. In addition, this acquisition further extends Jones’ reach into the designer footwear business through Kurt Geiger’s portfolio of high-end brands and presence in leading department stores, such as Harrods and Selfridges. Kurt Geiger will serve as Jones’ hub in Europe. Jones believes there are exciting opportunities to optimize the portfolios’ existing and new brands. The Company expects to achieve significant revenue synergies by leveraging the combined networks of partners, infrastructure and strong department store relationships to expand product distribution worldwide. On a trailing 12-month basis ended April 30, 2011, Kurt Geiger realized net revenues of approximately $332 million (or approximately £205 million).
The Kurt Geiger management team remains fully committed to the growth of the business. Neil Clifford will continue as Chief Executive Officer, and will continue to lead the Kurt Geiger management team; Rebecca Farrar Hockley will remain Buying and Creative Director; and Dale Christilaw will continue as Finance Director for the Kurt Geiger team.
Wesley R. Card, The Jones Group Chief Executive Officer, stated: “This transaction is about pursuing opportunities to optimize our portfolio and establishing a strong foothold in Europe. The addition of Kurt Geiger to Jones is consistent with our strategy of identifying companies with best-in-class talent and proven brands that have the potential for substantial growth. We have the utmost respect for Neil and have gotten to know the team well over the years as our distribution partner for Nine West in the UK. We welcome them to Jones.”
Richard Dickson, The Jones Group President and Chief Executive Officer of Branded Businesses, stated: “Our mission is to build the most powerful portfolio of brands in fashion. As part of our framework for growth, we are optimizing our existing portfolio and launching new brands to create value. Kurt Geiger’s portfolio of premier footwear, exceptional brand management and best-in-class product expertise makes it an ideal complement to our business and long-term goals. By leveraging our deep retail networks worldwide, there is substantial opportunity to grow Jones’ revenue base internationally and to introduce Kurt Geiger’s brands to the U.S. We look forward to collaborating with Kurt Geiger’s leading design and merchant talents, who will be instrumental to the rollout of our mission.”
Kurt Geiger distributes owned brands, including Kurt Geiger, Carvela and KG, and licensed brands, including Nine West, French Connection and Lipsy, in 49 company-operated retail locations and department stores. In addition, Kurt Geiger operates 156 multi-branded shoe concessions in 14 major department store groups including Harrods, Selfridges, House of Fraser and La Rinascente, working with over 100 brand partners to deliver the best selection of the world’s most reputable brands. Since its management buyout in 2008 (backed by Graphite Capital), Kurt Geiger’s strategy of investment and brand growth has led to increases in revenues and profits, in addition to the doubling of the number of Kurt Geiger stores to 60. Kurt Geiger continues to drive global expansion and has already established a substantial presence in the Middle East, including stores across Dubai, Bahrain and Qatar, Russia and Turkey.
Neil Clifford, Kurt Geiger Chief Executive Officer, stated: “Kurt Geiger has experienced exceptional growth over the last five years via the expansion of the core business and commitment to increasing our global presence. Kurt Geiger is still relatively young in terms of growth profile, with great potential still to be fulfilled. We have developed a strong relationship with Jones and recognize it as an established designer, retailer and wholesaler in the U.S. Jones has a clear track record of supporting and growing its brands, and we are confident that we have found the right strategic partner to help evolve our business. We look forward to leveraging our global infrastructures to bring the Kurt Geiger and The Jones Group brands to more audiences worldwide.”
About The Jones Group Inc.
The Jones Group Inc. (www.jonesgroupinc.com) is a leading global designer, marketer and wholesaler of over 35 brands with best-in-class product expertise across five divisions: apparel, footwear, jeanswear, jewelry and handbags. The Jones Group has a reputation for innovation, excellence in product quality and value, operational execution and talent. The Company also markets directly to consumers through branded specialty retail and outlet stores and through its e-commerce sites.
The Company's nationally recognized brands and licensing agreements (L) include: Nine West, Jones New York, Anne Klein, Rachel Roy (L), Robert Rodriguez, Robbi & Nikki, Stuart Weitzman, B Brian Atwood (L), Boutique 9, Easy Spirit, Gloria Vanderbilt, l.e.i., Bandolino, Enzo Angiolini, Nine & Co., GLO, Joan & David, Jones Wear, Andrew Marc/Marc Moto (L), Kasper, Energie, Evan-Picone, Le Suit, Mootsies Tootsies, Grane, Erika, Napier, Jessica Simpson (L), Dockers (L), Sam & Libby, Givenchy (L), Judith Jack, Albert Nipon and Pappagallo.
About Kurt Geiger
Kurt Geiger is Europe’s largest luxury shoe retailer and has four own label brands – Kurt Geiger, KG by Kurt Geiger, Carvela, and Miss KG – and over 100 luxury brands in its portfolio.
The company has over 200 trading locations with over 156 concessions in Europe’s leading department stores, including Harrods, Selfridges, Liberty, House of Fraser, Fenwick John Lewis and Brown Thomas as well as 49 company-operated stores. It is also the chosen footwear partner of BAA in UK airports. In September 2005, Kurt Geiger achieved its first international move with a concession in Printemps, Paris followed by being chosen as the strategic footwear partner for La Rinascente store group in Italy. 2007 saw the company sign its first licensing deals with French Connection followed by Lipsy.
In 2008 Kurt Geiger entered into a franchise partnership with Landmark International to open stores across the Gulf region. Franchise partnerships have subsequently been entered into in Russia and Turkey.
Since the 2008 management buy-out by Graphite Capital, Kurt Geiger's strategy of international investment, its focus on own brand stores and its market-leading retail distribution network has successfully led to robust growth in revenues and profits.
